As Authorities Raid Bulgarian Offices of Confused Crypto Lenders Nexoaccusations made in leaked emails three years ago offer a glimpse of today’s collapse.
Nexo faces scrutiny from every angle of the regulatory lens, but was an email sent by one of its estranged co-founders in 2020 an attempt to raise a alarm?
Cryptocurrency lender Nexo has become the latest industry player to fall into deep water amid a thorough investigation by international regulators into alleged illegal activities.
recently, US Securities and Exchange Commission (SEC) has fined Nexo a total of $45 million for failing to register offers and sales of profit-earning products (EIPs).
Back at the company’s headquarters in Sofia, the Bulgarian capital, the situation is equally bleak. On January 12, more than 300 investigators, police officers and security guards raided the company’s 15 sites.
This was because it investigated the formation of organized crime groups, tax crimes, money laundering, unlicensed banking activities, and computer fraud.
These are very serious allegations and Fintech Times It may indicate that they may sound true.
Schlef’s email
A child who is not embraced by the village burns down the village and feels its warmth. And the heat surrounding Nexo right now may have been first ignited by an email sent by the Nexo co-founder. Georgi Schlef to the company’s management team in 2020.
Shulev’s email primarily makes three accusations, all of which target the co-founder of Nexo. Costa Kanchev, with whom Schlef founded the company in August 2017. adjacent co-founders, Antoni trenchchev When Karin metdievis also a company partner.
These charges allege the company’s gross mismanagement, rampant misconduct, and prevalent schemes for abuse.
from lockout and pocket
The first charge is that Kantchev seized Shulev’s portion of the company’s shares. Schlef explains that he and Kanchev agreed to an equal share split when the company was launched.
In addition, Nexo Sedissimo co-founder and CEO Sokol Iankov, as a legal entity. Trenchev, Metodiev and some of the company’s management were also to receive these shares. Still, Schlef confirms that despite “multiple opportunities” to address the issue, “these promises were never fulfilled.”
Shulev also refers to an email Iankov sent to management on June 5, 2020.
It’s unclear if Trenchev and Metodiev received the shares, but the emails clearly indicate their concerns.
“The company continues to operate with Costa as sole owner,” the email continues.
Prior to this, Shulev arranged a meeting with Kantchev for August 21, 2019. This meeting was to discuss the allocation of shares to legitimate recipients.
“During the conversation, when he realized how these promised shares would change the original 50/50 allocation, Costa announced that he would have to scrap the original agreement and go to the yacht instead of the office. implied,” Schlef’s email said. “He made it clear that keeping our equal shares was not an option for him.”
Shulev indicates that Kantchev avoided further discussion of the distribution of the remaining shares and instead closed the meeting and left the next day.
Two weeks later, Kanchev allegedly returned to his office “as if there had been no conversation.”
A week after Kantchev returned home on September 13, Shulev said he had completely lost access to the company. This included access to his email, accounts, and funds.
Schlef states that following this, he repeatedly tried to contact Kanchev, Trenchev and Metdiev on the matter, to no avail.
He realizes that Kanchev’s previous plan to fire Metdiev in a similar manner has now become his reality.
“In this way,” Schlef continues. To this day, I think he’s the only one with stock in his Nexo, a company that actually owns something. “
illegal activity
The second accusation made in Schlef’s email is even more alarming than the one about internal power struggles.
Shulev alleges that the company routinely engages in illegal activities in Bulgaria and many other jurisdictions. This indicates that Nexo is using client assets without their knowledge. As Schlef’s e-mail advocates.
He suggests that Kanchev is using his employees in operations for illegal activities. However, previous regulatory investigations have not found any mention of these activities.
“Unfortunately, there are still many highly intelligent people working at the company who are always trying their best to improve their skills,” the email reads. Shulev says employees are unknowingly involved in illegal activities every day in multiple jurisdictions.
“Costa has called these people rats many times, but they continue to contribute to the development of Nexo and, above all, to the profits he accumulates.
“My ambition was to make Nexo the leader in its field. Yet this is exactly what Costa changed the company for.”
These claims were partially confirmed this week when the SEC fined Nexo. This may not be the last time we hear about Nexo’s wrongdoing, as a corresponding investigation by the Bulgarian authorities is underway.
The true face of Zeus Capital
A third accusation in the email refers to a triangle between asset managers and activist investors. Zeus capitalNexo, a blockchain technology platform chain link.
It started when Nexo announced a partnership with Chainlink in July 2020. With this partnership, Chainlink has integrated its own token, LINK, into his Nexo platform.
But just a week later, Zeus Capital produced and distributed it. report Most of all about Chainlink, which the report identified as a Ponzi scheme. A claim that has since been strongly denied.
A corresponding email sent by Zeus Capital advises investors to sell their long positions in LINK. But here’s the twist.
Shulev alleges that Chainlink’s own partner, Nexo, was behind Zeus Capital and its defamatory reports. A killer from within.
“I would like to point out that the email address to which Zeus sent the degradation analysis on Chainlink was only registered with Nexo,” his email states. “This proves that Nexo uses its own customer database and he is sending these reports on behalf of Zeus Capital.”
Adding to this revelation, he states that the Nexo and Zeus Capital websites share the same typeface code. This is proof that they share the same hand, but the typeform code mysteriously disappeared from Zeus Capital’s website shortly after it was revealed by Twitter user @ChainLinkGod. .
But why would Nexo have the ambition to act this way? If more investors backed Zeus Capital’s claims, a short position in LINK was created that Nexo allegedly sought to profit from. will be
Shulev has identified a conflict of interest between Nexo, who deposits LINK tokens for credit, and its customers.Many ‘believe that tokens have not been sold yet’ binance insured and safe instead bit go’” argues Shulev.
“We also do not comment on the fact that Antoni has proudly announced a partnership with Nexo and Chainlink. The main hidden purpose of this partnership is to attract additional resources to open short positions on LINK. is sufficient to provide evidence of conflicts of interest, market manipulation, misuse of personal data, and misuse of customer assets.”
bite the dust
It remains unclear how much of the claims made in Shulev’s three-year-old email are actually true. But looking back, it paints a fascinating picture of the downfall of cryptocurrency lenders.
In December, Nexo announced a phase-out of US products and services in time for the SEC’s $45 million fine. And now, with the doors of its Bulgarian headquarters shattered as much as its own reputation, it remains to be seen what the future holds for cryptocurrency’s latest fallen angel after a surprising leak from one of its co-founders. Unknown.
